Irwin had always been there to help and advise me from day one, and I had constantly called upon his expertise and foresight, but I recognized that I needed his undivided attention from here on in if the company was going to continue to grow successfully. I’d asked him to officially join me in Love and Quiches, and now I pressed him for his answer. But although he had already become an integral part of the effort, the proposal remained on the table for the time being.
We all agreed that the time had come to launch our search for yet another new home. We were mindful of the logistics of our existing staff and didn’t want to lose them, so we followed the same course we had when we made our move to Oceanside: concentric circles. We started our search across the street at a twenty-thousand-square-foot warehouse that one of our suppliers for pie tins, paper goods, cartons, etc. was moving out of. Even though it was four times the size of our current facility, we deemed it too small.
Next we looked at a defunct tennis center around a very long corner, which had the advantage of office space situated on a balcony overlooking what would be the production floor, but this building presented other problems. Although it was merely half a mile away from our present location, it seemed more like a world away. The building itself was extremely isolated, unappealing, and dreary, surrounded as it was by many huge oil tanks and a landfill. It was quite obvious why the tennis center had failed, and I wanted our staff to look forward to pulling up to the building in the morning, not dread it. This was definitely not the right move, even at forty thousand square feet.
Our current location was abuzz with plenty of activity, what with light manufacturing places, outlet stores, banks, coffee shops, and other services nearby. (There was also a butcher who had been selling us butter at a price that we should have known was a bit too good. We discovered that it was government surplus when one delivery arrived and he had forgotten to peel the paper off of the packaging—it was clearly marked as “Surplus” and “Not for Public Sale.” So much for that.)
Those were the only two buildings of any size in the area, which made expanding our search a necessity. We hired a commercial real estate broker—a family friend—and in spite of his protests because of its reputation as a dangerous area, we found our way to Freeport, only ten minutes farther away.
Thirty years ago, the village of Freeport was an area of contrasts; poverty and racial unrest coexisted alongside a thriving waterfront replete with sprawling homes and a lively “restaurant row.” Still a vibrant mecca today, Freeport draws both locals and tourists alike to the scenic restaurants, bars, and fisheries along its canals. An industrial park was built there on the grounds of what used to be a stock car racing arena, which was a popular place to take a date when we were teenagers. Irwin and I would go there with a group of friends a few times during the summer, and then we would all go down to the waterfront area for fried clams and shrimp.
We decided we would concentrate our search here. At the same time, Irwin officially signed on, as I had always hoped he would, and I was happy. The prospect of a partnership both in marriage and in business had given him pause, but we have had a good life, and it was the right decision.
A Lease Gets Signed
Despite so many people advising us against the area, I had a good feeling about Freeport from the very start. It felt open and calm. The area has always served us well, with a plentiful labor pool of fine and hardworking people, many of whom have been with us for fifteen or twenty years or more. Freeport generates its own power, offered at a much lower rate than the Long Island average. Added to these benefits, the town fathers have always bent over backward to help us whenever possible because we provide a great many jobs in the community. The building we were considering was directly on a canal. I love water, having been brought up in a community right on the ocean, where we walked the beach all year long. Freeport was perfect.
We drove around the industrial park and quickly identified what, in my opinion, would be the perfect building. It was thirty thousand square feet. The ceilings were considered low at fourteen feet, but in my innocence I thought of this measurement as simply more energy efficient. Now I wish we had some additional headroom for platforms, extra storage, and the like. However, there was quite a lot of room for expansion on the outside. As the years passed, we built many additions, one by one, as the business grew. We expanded our capacity in other ways as well. For example, we purchased some high-speed equipment that allowed for much greater output per hour—by that I mean production—within the same space. Very often, efficiency trumps square footage.
Negotiating with our potential new landlord was trying; it felt more like we were vying for one hundred thousand square feet of the most prime floor space in the Empire State Building! Lots of lawyers, lots of rewriting the contract, lots of arguments, and many weeks going by, but we finally ended up with a quite favorable lease with a right of first refusal and an option to buy, which meant that they could never sell the building out from under us. (We still do not own the building because of some estate issues on the landlord’s side, but we continue to enjoy favorable terms, and we have an easy out should we decide to move on.)
After many marathon negotiating sessions, the lease finally got signed, and Irwin and I, our new landlord, and the lawyers from both sides all repaired to the legendary Algonquin Hotel for an after-midnight champagne supper. It was really that late, and we had earned it!
Actually, our new landlord reminded me a lot of my father. He had an opinion about everything, and he visited quite a bit more than he had to in order to check on our progress.
Quiche Factory #4
In the space of seven years, we had traveled from my kitchen, to my garage, to the little shop across from the firehouse, to our first commercial space in Oceanside, to our current home in Freeport. We were finally in a position to do some serious business. During this learning curve, we went from no dollars to just over $2.5 million—not too bad for a business that came from nowhere and started with nothing. We had put quiche on the map as an alternative to the hamburger, presenting it as a meal when accompanied by salad. Not quite Oreos, but still!
Incidentally, we found a tenant for the Oceanside facility because our lease was not yet up. We sublet it to the Knish Factory, run by a successful local kosher caterer. The man had been a friend of Irwin’s older brother, and Irwin always admired him because he was the only one of his brother’s friends who had a job. We sold him—and in some instances just left him—whatever equipment we would not be taking with us, including our rotary ovens, for $20,000 plus a $5,000 interest-free note due in five years. It was quite a bargain since the equipment we left behind was worth many times that. When the note came due, the tenant admitted he had been hopeful that we would have forgotten about it. Not likely. Anyway, he finally paid us.
I think that in the hope of continuing to attract some of our walk-in trade, he had done his street-front signage in the same colors and style as our Love and Quiches logo, calling it the Knish Factory instead of the Quiche Factory. Not exactly purposely, I don’t think; but even twenty years later, people would remark to us, “Hey, I just passed your place on Lawson Boulevard!”
Our move to Freeport was very different from the others. In prior years, we had financed whatever equipment we needed with proceeds from the business, but fitting out this plant properly would require some major financing. Unless self-financed, there is no way around this for any start-up or newly established business. My father had originally counseled me to develop a good relationship with a small local bank, and we did our original banking with Peninsula National Bank. They were taken over by the larger Norstar Bank, which was in turn absorbed by Fleet Bank. It was with Fleet Bank that we sought our financing.
Nothing about the growth of my business came easily. The timing of this move coincided, with exquisite irony, with an unprecedented escalation of interest rates—just when we had borrowed serious money for the very first time.
During the recession of 1980, interest rates
soared to 22 percent and higher, and we had projected, at most, 14 percent when seeking our million dollars of plant financing. This spike affected us profoundly, our biggest challenge to date.
Here we were, about to enter the next phase of our journey. We had our first really detailed business plan, our architectural engineer on board, our professionals and equipment suppliers all drawing up the construction plans—yet these unprecedented interest rates were looming above us. It was too late to go backward. Moreover, I was determined to move forward and overcome the obstacles in my path even if it meant I had to sign away my life in the process.
We approached Fleet Bank with our financial plan, which included our intended floor plan, the equipment required, an operating budget, and our somewhat vague sales projections. Our accountant, who helped us prepare the plans, was the same one I had originally worked with when I was starting out, back in 1973. The projections were sound enough for the bank and we were granted our loan. We financed everything, both the construction and the equipment, through this one loan. And everything, including the spatulas and my house, was put up as collateral. Needless to say, betting more than you can afford to lose is an extremely dangerous gamble, but in this case I disobeyed my own rules. The total package amounted to about $1.2 million.
We took a deep breath and got started. We had the luxury of having our Oceanside facility fully operational until moving day, which fell on Labor Day weekend of 1980. We had no major equipment to take with us, since we left almost everything behind. All we had to move was our meager office furniture, a few 80- and 120-quart mixers, our pans, various racks, scales, storage bins, a few tables, and inventory of raw and finished goods. We accomplished most of this with our own trucks and the Love and Quiches Motley Crew; the rest went with a local moving company.
We had hired an architectural engineer to draw up the plans both for design of the workflow and to provide the City of Freeport with required blueprints: plumbing, electrical, etc. He also ran the job for us. Jay was semiretired and elderly, but he possessed the energy of a twenty-year-old; we found him through a network of my father’s friends. He really knew what he was doing, and working with him provided me with one of the most memorable periods in my business career. He was amazing.
As you’ll recall from chapter 5, “The Mini-Factory (1976-1980)”, my father-in-law, a retired plumbing contractor, ran this part of the job—just as he had for the Oceanside mini-factory. Considerable electrical work was required, and for that we used a local independent electrician. He worked for the town by day and moonlighted our job by night. He was Italian and was constantly bragging to us about what a great cook his wife, Rose, was, so I gave her my pasta maker—since by then my home cooking days were pretty much over. We also hired a local flooring contractor to quarry-tile the six-thousand-square-foot production area. Our jack-of-all-trades, Willie the handyman, was around for odd jobs despite the fact that he really couldn’t paint.
The main heavy equipment—ovens, pan washer, refrigeration, and freezer—were built and installed by the manufacturers, as is customary, and training the employees on their use was included in the price. We had thought our eighteen- and twenty-four-pan rotary ovens in Oceanside were quite grand, but here we left them in the dust. We started out with two sixty-pan rotary ovens, then added two more, and finally added an eighty-pan oven as the years went by. Jay, our engineer, had included space in his designs for this type of expansion. We graduated to 140-quart, then 400-quart, and now much larger mixers and dough makers as well.
Yet we were still in some ways a do-it-yourself outfit. We recruited many of the Love and Quiches workers to help in the renovations, and they appreciated the overtime, besides wanting to be a part of it all. Both Jay and my father-in-law put my son Andrew and his friends to work, home as they were for the summer following their freshman year at Michigan State Hotel and Restaurant School. They performed a lot of the grunt work, just as son Irwin had done for his father when he was a teenager. I was one of the grunts, too. My mother-in-law was recruited to sit in the office all day throughout the summer to answer the one phone we had at the time. And my father hung around quite a lot, almost daily, as did our new landlord. They were enjoying themselves.
It was a long, hot summer. We all worked like horses; lots of “blood, sweat, and tears.” But by summer’s end, the renovations were completed, the equipment was up and running, and we were finally ready for the big move.
The Big Move
We accomplished the move in three days flat over the Labor Day weekend. All of our employees made the move to Freeport with us, and we were ready for business for the fall season of 1980, our busiest time of the year, by Tuesday morning with no disruptions.
Our new facility was so grand we were sure it would do very well until the end of time. We had real offices that were half the size of the entire Oceanside facility, an employee lounge, a separate retail shop (later converted into our test kitchen when we took some space across the street and moved the shop there), more than six thousand square feet of production space, a refrigerator bigger than our first house, and a freezer equal in size to the entire Oceanside mini-factory.
In fairly short order, however, six thousand square feet of production space became uncomfortably small. This was painfully evident when we needed to decorate our delicate Whipped Cream Cakes right next to the ovens, which generate a tremendous amount of heat. Sometimes the whole production area exceeded 100 degrees! Piping whipped cream rosettes and packing frozen cakes alongside the ovens was never fun. On some days, we provided the whole deco line with jackets and moved them into the refrigerator!
But on the plus side, with this move we also now had almost nine thousand square feet for packing, shipping, and storage, a mechanics shop, and, finally, a loading dock. And, all of this with a water view!
Despite the advantages of the new space, our first year or so in Freeport was brutal. We were struggling with the reality of that 22-plus percent interest rate, floating about two points over prime, during this hyper-inflationary period. The bank had serious doubts that we could survive this economic debacle, and for a little while we had our own doubts. We started to secretly call our bank officer “Black Jack Fagan.” He was the prophet of doom and advised us either to give it all up and call it a day or to find a new bank. That, for me, was not an option. This very difficult period, among others that I will recount, almost took us down.
We found out pretty quickly that coming into this building with a bit less than $3 million in volume was simply not enough. We needed some quick growth, and happily, it started to come. I was on the road quite a bit, picking up more distributors in the tri-state area and beyond. Elaine started doing more outside sales too. We also moved one of our truck drivers, an original member of the Motley Crew, into local sales. Everybody agreed he was very “cute,” and he turned out to be very good at sales. He ended up running our local direct sales department, and later, after he married, his wife also joined Love and Quiches, working in distributor sales up and down the East Coast for many years. (We have never discouraged nepotism; in fact, it has mostly worked very well for us.)
Most importantly, we still had our biggest customer: the restaurant chain that had ordered the six thousand cases of our Pecan Brownie Pie as a six-week special. Once it landed a place on their permanent menu, the Pecan Brownie Pie provided us with much-needed and steady volume, almost $1 million yearly, and that one account was instrumental in getting us through this trying period. Later, we provided products for other restaurant concepts the group developed and introduced. We had an excellent relationship with the buyers, and we were privileged to be invited to take a tour of their seafood processing plant on the west coast of Florida. It was fascinating, but much to our surprise, the workers peeling shrimp were paid by the piece, not by the hour.
After the tour, we stopped for lunch at the very first unit, complete with a “Welcome Susan and Irwin” sign! Much to my chagrin, they were serving alligator as an ap
petizer that day. Definitely not on my list, but I had to be polite and taste some.
So, we survived the move and increased overhead, the interest rates began to moderate, and we doubled our volume in the first two years in Freeport. We had reached just under $5 million yearly. We began to prosper.
Our office staff grew. We now had reps for customer service, accounts receivable, accounts payable, a warehouse manager, and our old-fashioned controller Mildred (who looked the part right out of central casting), as well as a small sales staff. We also contracted our first payroll service, ADP, and it was through them that we began our first simple foray into computerization, limited as it was to invoicing and rudimentary accounts receivable. Our accounts payable were still done by general ledger, as was our inventory, and there was nothing yet in the way of customer or product analysis. The early eighties and the computer age were still ahead of us.
We continued our growth into more restaurant chains and more distributors, and we further penetrated the airline industry. It was an exhilarating period, and for the time, I was breathing a bit easier.
Chapter 7
Spreading Our Wings (1980–1989)
I believe in luck, but you have to go out and find it.
—Oscar de la Renta
When we first moved into Freeport, our offices were still a study in catch-as-catch-can. The back of the house was equipped, all shiny and ready to go, but we still had no furniture in our offices. We sat all over the floor to do our work. The employee lounge had no tables and chairs for lunch breaks, but we did have a pool table and a ping-pong table, and there was always a game in progress. What we did have was in order, and we were ready to do business.
Today in the office at Freeport we still have a closet full of archives, and I recently discovered a treasure trove of information and examples of how we did things in the early eighties. What I suppose should be embarrassing is quite funny, in retrospect. The important thing is that the mistakes of our beginnings—which we were still making aplenty in Freeport—didn’t keep us from building more business.
With Love and Quiches Page 9